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'Minutes of actions taken by the Board of Governors of the '4-41 Reserve System on F iday, November 30, 1951. PRESENT: Mr. Mr. Mr. Mr. Mr. Martin, Chairman Szymmik Vardaman Norton Powell Mr. Carpenter, Secretary Mr. Sherman, Assistant Secretary Mr. Kenyon, Assistant Secretary of actions taken by the Board. of Governors of the illu ?e,4 Reserve System on November 29, 1931, were approve. umq111110141y. ...alf3 ktiklta that to the Federal Reserve links of Boston,New York, 0h10aGo, St. Louis, 1,iiisas City, and San liTuncisco stating Lo,„,as asproves the establishment without chane 1w the Federal 'I14erve 1 3ariks (/' Boston and St. Louis on No'vember 26, by the Fedorul k of S.n 'Ir%lici-co on 1.4 vember 2(, by the Federal Reserve Bank t Alaem+ Novber 28) by the Federal ReserveB-Lnks of New York and eke ort " 48 41 Novembe 29, and by the l'ederal Reserve Bank of Kansas City 11°Ilerlb()r 30, 19511 of the rates of discount and Purchase in their Approved unanimously. ndum dated November 28, 1951, from Mr. Norton, referring ment approved by the Board on June 19, 19)1, under which Egbcrt, Secretary to Mr. Eccles,as to be retuined on the the p rd until November 30 1951, to afford 1-1E.,r an opportunity 41").471,07Ahrl 11130/51 -2-- t°E0 throuahir. Eccles' personal file for the purpose of determining material should be turned over to the Board for its official files, 44 recommending that, although her salary would terminate on November 3°) Miss Egbert be permitted to retain an office in the Federal Reserve for such might be necessary to enable -,2eri(xt in December as her to complete the h,r proved unanimously. Letter to Mr. Hill, Vice President of the Federal Reserve Bank acle12hia, reading as follows: 'In accordance with the request contained in Yjur letter of November 27, 1951, the Board approves 1e desiLnation of the following as special assistant -miners for the Tederal Reserve Bonk of Philadelphia: Leonard McCann Stanley J. Grigalunas Francis McGirney alter C. Benz John A. Muntz lEeduard H. Keane John W. Murray John J. Lowery Henry A. Rickert, Jr. Harry K. Margolf Appropriate notations have been made in our records or a ,the Lamer: to be deleted from the list of special assist11Q examiners." 2 Approved unanimously. Letter to the Presidents of all Federal Reserve Banks, reading elaowe: forwarded to you today under separate Cover"There have been copies of form F. R. 107 to be used by State raemb„ banks in submitting their reports of earnings and dends for the calendar year 1951. The form is the same 19 he one used in submitting reports for the calendar year )u, except that the words 'and excess profits tax' have 177 11/30/51 -3- "been added to the income tax item 7. "The Board's letter of May 31, 1951, transmitting the mid-year earnings forms, mentioned certain revisions affecting taxes on net income that would be made in the next reprinting of the Board's Instructions for the PreParation of Reports of Earnings and Dividends, form F. R. 1°7a, in the interest of uniformity with the Federal DePosit Insurance Corporation and the Comptroller of the C jrrency instructions. Since that time the FDIC instruc2-ons have been reprinted containing the instructions to effect that both item 2(f), taxes other than on net IneMel and item 7, taxes on net income, should include current taxes adjusted for all over and under accruals, -unds, and deficiency payments. Similar revisions will fpe made " in the next reprinting of the Board's instructions." Approved unanimously, with the understanding that the letters would be mailed when the forms have been printed. Letter to Mr. Gerhard Gesell, Covington & Burling, Union Trust 131111cling) Washington, D. C., reading as follows: "The Board has received and carefully considered your of November 28, together with a memorandum from the 0 4de1tor for the Board dated November 29, relating to the ' 'cler of oral argument in the above matter. l The dominant question to be argued to the Board is ether or not a divestment order should be entered against i'll ansamerica. The Board's Solicitor contends that it should ' be Counsel for Transamerica contends that it should not. all the circumstances, it is the Board's opinion that, in theance with the usual procedure followed in presenting fin affirmative and the negative of an issue, the Solicitor 'the Board has the right to open and close the argument. /i1 ,the Board's Solicitor and Transamerica's counsel desire t the Board has no objection to follow a different procedure, ro hearing argument in any order upon which the Solicitor 141% the Board and counsel for Transamerica mutually agree. 1,1„the absence of such an agreement, however, the Board 4-J-1 expect its Solicitor to open and close. By direction of the Board." let4- n Approved unanimously. 1113o/51 Telegram to the Yresidents of all Federal Reserve Banks, reading as follows: .. "0 (e) of Regulation X provides an exempceel,lon ) ti on for credit to finance the purchase or construction °f a structure to be used in substitution for a similar structure or which the borrower 'has been depried through by reason or eminent aomain or condemnation proceedings'. ection (,(e) of the regulation provides an exemption for ?!edit extended by a Registrant in connection with a sale • 1 property 'acquired by him through foreclosure proceedtzcs Several questions have been raised from time to time to the meaning of 'proceeeinjs' as used In these secotions. or example, is section 6(e) applicable to a sale property acquired not through strict mortgage foreclosure 111111' bY deed from a trustee in bankruptcy of the defaultinc ...°1"tCae_o1? As a further example, does the applicability sectton 5(e) extend to a borrower who has sold property tulaer (t threat of formal eminent domain or condemnation Proc eedinr:s? It is our understanding that it is a common practice E lenders to avoid the expense and delays of formal ' fcreclosure by accepting from a defaulting mortgagor, or sr e°1a his trustee in bankruptcy or other qualified reprethritative of creditors, a deed in lieu of foreclosure, and cloat most property which may be subject to formal eminent v illain or condemnation proceedincs is acquired through setin lieu Of formal proceedings. To limit the aplicaitT these 1)rovisions to cases where there have been proceedings and. , court order :-;s1,/cd woul(1 1-)e unneceQrraal 8arily stc'et 1.,,ad would defeat the purpose for which the c eMDtions vero . rovided. Accordingly, we 'believe the ay)li,:litY of the frovisions should extend to cases or the tn1 t v '7-1 mentioned above, and other similar cases of property to"sfers, when the circumstances clearly show the transfer fo be in lieu of formal eminent domain, condemnation, or Ise closure proceedings." 4 Approved unanimously. ;:3ecrtary.
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